- The first thing that my eye is attracted to is the 50 Day EMA, which is an indicator that a lot of people pay close attention to anyway.
- The fact that we gave back our games that touched that indicator and are now testing the lows of the last week tells me that the market is not quite ready to take off to the upside.
- Furthermore, it also warns that perhaps we could see a bit of a drop from here, so if we were to clear the 0.6250 level to the downside, we probably lose another 50 pips.
On the other hand, if we can finally stay above the 0.63 level for any significant amount of time, perhaps even the 0.6325 level, then it opens up the possibility of the Canadian dollar driving all the way up to the Fr.0.64 level. That is essentially where we are seeing the 200 Day EMA hanging around there, which of course is an area that a lot of people will be paying attention to it. Anything above there would open up a significant amount of momentum to the upside.
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Canada and Friday
Keep an eye on the Canadian dollar on Friday, because we do get the employment figures coming out of Canada simultaneously with the Non-Farm Payroll announcement in the United States. While the US jobs numbers might not initially come to mind as far as what’s going on with the Canadian dollar, you have to keep in the back of your mind that the United States is the destination for something like 85% of Canadian exports. In other words, the Canadians need the US to do fairly well. Obviously, the Canadian job market will directly influence a Canadian dollar also, so really what you want to see if you are bullish in this pair is good numbers coming out of both Ottawa and Washington.
Another thing to keep in mind is that this is a risk on/risk off type of pair, meaning that we need good risk appetite to send this market higher, just as poor risk appetite will send it lower as the Swiss franc is considered to be a safety currency.
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